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No Loans Yet Approved By State Agency
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Connecticut’s program to help homeowners caught in the subprime crisis has not yet resulted in a single loan.  But finance authorities say it’s too early to pass judgment on the plan.

The $50 million program, Connecticut Families, is administered by the Connecticut Housing Finance Authority, and was launched last November as a way to help people caught in adjustable rate mortgages.  It is targeted to first time homebuyers with subprime loans – it’s estimated there are around 3,500 in the state.  If these buyers are worried that a reset would make their mortgage unaffordable, they can apply for backing on a 30-year fixed rate.  The program was quickly inundated with two thousand enquiries, and at least 400 potential borrowers have made contact with the three lenders who will service the loans.  But so far not one application has been approved.  Mina Minelli, vice president of mortgage banking at Webster Bank says the applications just don’t meet the lending guidelines.

"Unfortunately a lot of them had credit challenges, had income challenges, had challenges with the values of their properties, and some of them were already in foreclosure, some of them had lost jobs.  So our heart goes out to a lot of these families whose situations changed dramatically."

The Connecticut Housing Finance Authority says the lending guidelines follow federal underwriting standards, and that the lenders involved are currently investigating whether there can be any flexibility.  Carol DeRosa of the authority says although no applications have made it to final approval, so far there have been 22 loan reservations, totaling just over four million dollars.  She says in comparison with other states Connecticut is making reasonable progress.  So far, six other states have begun similar programs, with some of them in operation for more than six months, and between them, they have authorized 92 loans.